I am looking into this; so far the only method I have found is changing all free shipping to the new label, not just the national free. So I will keep working on it. I may need to have Jamie write in a filter so we can change it using a filter.
We will be looking into more shipping options as soon as we can; first we need to re-write the way that commissions are calculated, and after that we’ll be able to integrate with more shipping plugin and offer more options. Until then, the local option was not something Jamie could reasonably write in to the new options for v1.4.0. I actually brought this up a few times as we were developing the options for v1.4, since it has been requested by quite a few users. It was not included due to troubles with coding in that option, and was moved to a planned enhancement for a future release.